Contract Mistakes You May be Making

Every business owner and start up has more tasks than time. Product launches, marketing strategy, hiring and managing a growing team, keeping track of money and metrics it can feel overwhelming! In that fast-paced environment, it is easy to overlook a detail or skip a step to save time, or close a deal. There are many contract mistakes you may be making with your clients, subcontractors, or suppliers which can put your business at risk. Read on to understand what they are, and how you can avoid it. 

Not Documenting Accurately 

In business, things move quickly, and changes can happen fast. The details, specifications, and pricing discussed at an initial meeting may shift in the following days and weeks. Changes may be verbal, through email, or in text messages. Several people involved with setting up the project or contract may be participating in these discussions. Clearly setting out everything that was finally agreed to, in one document, at the end of the contracting process is critical to avoid disappointments, disagreements, and conflicts down the road. Memories are not reliable, especially in a fast-paced business environment. Someone may clearly remember asking for something specific, but forget that the other party did not agree to it. Not documenting accurately is one of the most common contract mistakes you may be making. Avoid this risk for your business by setting up a clearly detailed contract to fully document all the terms, conditions, and responsibilities of both parties. 

Standardising 

As consumers, we love having options. We enjoy being able to choose from different flavours, varieties, and sizes. We love customising our products and experiences. Offering that level of personal service to your customers is

wonderful. Running your entire business like that is not. When it comes to operating a business, there are 3 main benefits to standardising systems, processes, and paperwork. First, it saves time. It is more efficient to have established forms and templates ready to go, rather than starting from scratch. Second, it allows for delegation. Standardised processes makes it easy to assign 

tasks to staff or outsource to a freelancer. Building a business takes a team, and standardisation means everyone on the team is following policies and procedures. Third, it prevents oversight. Nothing can get left out, overlooked, or forgotten if a system is being followed. The bottom line is that standardising a set of contracts saves time so you can focus on closing deals. 

Not Legally Binding 

Like the famous line in the award winning film Glengarry Glenn Ross - always be closing. Sure, that story was about sales, but it counts in contracting also. Not getting a signature is the biggest contract mistake you may be making. Anytime you enter into a business relationship with a client, sub-contractor, or supplier, be sure to close it with a proper contract. Without a properly documented and dated signature, your contract is not legally binding. Sending it over by email is not good enough. A scribbled initial while out for dinner and drinks to celebrate the deal is not good enough. A verbal agreement while socialising at a game is not good enough. The best thing to protect your company and minimise risk in a business relationship is to get legal advice on contract preparation and ensure it is legally binding. 

As a legal partner for businesses, we’ve seen firsthand how damaging and stressful it is when people don’t do contracting right. We provide full contract lifecycle management and have a startup programme which can protect your business from these and other contract mistakes you may be making. Get started today to get more focused on closing deals!